Starting Business

And when do you need it? The German “polizeiliches Führungszeugnis” is the equivalent of the British “enhanced criminal record certificate” as defined in sec. 115 Police Act 1997, sometimes also referred to as “certificate of conduct”, “good-conduct certificate” or “police clearance certificate”. The Führungszeugnis is an official document issued on special green paper by the German Bundesamt für Justiz (Federal Office of Justice) in Bonn. It lists criminal offences above a certain threshold, usually if someone…

What are the Duties of Directors of German Companies (GmbH) and Corporations (Aktiengesellschaft)? Obviously, pretty much all over the world, company directors and CEO’s have a general duty to be loyal, diligent and conscientious in managing the affairs of their company. This is also the case under German law. Directors and CEOs have to bear in mind what is best for the business and act accordingly. In this regard, German courts do apply an objective…

The German Habit of sending out Cease and Desist Letters to Competitors When you start trading in Germany you may be in for unpleasant surprises. The first letter your German subsidiary receives may likely be a formal cease and desist notice sent by your competitor's lawyers. Why? Because under German unfair competition laws, every business has the right to formally demand competitors to fully comply with any and all German laws. And there are many…

What UK Suppliers should know about German Commercial Law You are a UK based supplier using a German-based distribution agent (Handelsvertreter) within Germany? So far, so good. However, in case you have accepted German law to be applicable or if you have chosen to remain silent on the issue of applicable law: Are you aware of what will happen upon termination of the distribution agreement? German law differs significantly from UK law when it comes…

How to Incorporate a Company. What You Need to Know Are you thinking about establishing a business in the UK? Where do you start? This note will give you a brief understanding of the Companies Act 2006 and what you need to know in order to set up a business in the UK. The Companies Act 2006 provides for three types of companies to be established: Company limited by shares; Company limited by guarantee; and…

Your new German company is finally registered? Gratulations! But you are far from being done. Under German law (see section 14 Gewerbeordnung, i.e. German Trade Regulation), the commencement of a business activity must be notified in writing (Gewerbeanmeldung) to the local Ordnungsamt (Trades Office), which is a department of the municipal government, for example the city of Munich. This notification obligation also applies to any change in the business (e.g. move, modification to the nature…

German Company Register provides reliable, up to date information on all German businesses But it is a difficult read, even for native speakers. Every German company, partnership and association must be officially registered in the Handelsregister (Commercial Register). In contrast to England, where this information is collected centrally by Companies House, Germany uses a decentralised system. The "original" records of a company are kept at the respective local District Court (Amtsgericht) where the company has…

The biggest fear of any German HR department: Having covert salary employees among their workforce German labour law is strictly regulated and employees are well protected against dismissal if the employer’s workforce exceeeds 10 full time employees (details here). Furthermore, German wage tax (Lohnsteuer), health insurance, social security and state pension contributions are rather hefty (for more see here: Statutory Pension Insurance in Germany). Therefore, to try to avoid these labour costs, some employers but…

In this issue of „London Business Matters“, the London Chamber of Commerce's monthly magazine, German corporate and business lawyer Bernhard Schmeilzl has compiled "10 Top Tips when starting a Business in Germany". The magazine also contains helpful information about the trading relations between the UK and Germany. Just browse the online issue. For more details on how to establish a business in Germany please see the articles below 3 Ways to expand your Business to…

Establish a real German Company, register a Branch Office or start with a mere Representative Office If you want to sell your goods or services to Germans it is in most cases a huge advantage to be actually present in Germany. A German business address and phone number shows that you are seriously committed to doing business in Germany long term and thus builds trust with customers and business partners. But how to go about…